Origin Energy says it will sign an agreement with the governments of Papua New Guinea and Queensland to potentially support development of a large hydro-electricity project.

The 50:50 joint venture between Origin and PNG Sustainable Development Program Ltd could ultimately see the hydro plant built at PNG's Purari River, the nation's third largest waterway.

Under the plan, electricity from the project would be used to power villages in PNG and would be transmitted to Australia via Weipa to join the national electricity grid at Townsville.

Plans for such a project have been in existence since the 1970s, a company spokesman said, but have now been updated.

The governments of PNG and Queensland will on Wednesday sign a Memorandum of Cooperation with the joint venture company, PNG Energy Developments Ltd (PNG EDL) concerning the plans.

"Capturing the power of the existing river flows, the development under consideration would have the capacity to generate approximately 1800 MW (megawatts) of renewable baseload electricity," Origin said.

PNG EDL is currently evaluating the hydro-electric potential of Purari at Wabo, in the Gulf Province of PNG and about 350 km from Port Moresby.

By itself the run-off from the Wabo delta is about equal to one quarter of the run-off from all Australia’s waterways, and PNG’s highlands receive eight to 11 metres of rainfall each year, an Origin spokesman said.

If the project was completed it would supply into Queensland about five times more renewable power than currently generated in the state.Origin chief executive Grant King said in a statement that the ongoing assessment of the project was consistent with his company’s pursuit of renewable energy opportunities.

‘‘This would be the first project to deliver year-round baseload renewable energy into mainland Australia,’’ Mr King said in a statement.